News Corp. Christens Entertainment Co.
News Corporation (NWSA) recently announced that post split, its new independent media company will be christened 21st Century Fox. The company is on the verge of splitting its operations into 2 separate publicly traded publishing and entertainment entities.
The Entertainment Company (to be named 21st Century Fox) will encompass cable and television assets, filmed entertainment, and direct satellite broadcasting businesses including Fox broadcasting, cable network, Fox News Channel, the 20th Century Fox movie studio, BSkyB, Sky Italia, Sky Deutschland, and pay-TV operations in Europe and India.
The company is also fortifying its entertainment division by focusing on enhancing its portfolio of regional sports channels to solidify its Fox Sports Media Group’s position in the lucrative sports entertainment business, where it competes with Walt Disney Company’s (DIS) sports coverage network, ESPN.
Earlier, the company revealed that its new publishing company will start operations with $2.6 billion in cash and no debt once its planned spin-off is completed.
The Publishing Company (to be known as News Corporation) will comprise publishing businesses, education unit and the integrated marketing services business, with brands like The Wall Street Journal, HarperCollins and Amplify.
News Corporation named Robert Thomson, Editor-in-Chief of Dow Jones and managing Editor of The Wall Street Journal, as the new CEO of its publishing company. Alongside, Michael Florin has been appointed as the Senior Vice President and Head of Investor Relations for the new publishing company.
We believe that the split will augur well for News Corporation, which has been in troubled waters since the revelation of the phone hacking scandal that eventually led to the closure of the publication of ‘The News of the World’. Moreover, the company was held back from acquiring the remaining 61% stake in the British Sky Broadcasting Group.
Further with adequate cash, the new News Corporation will be better positioned than its peers, The New York Times Company (NYT) and Gannett Co., Inc. (GCI) to look for strategic acquisitions and expand its business.
Currently, shares of News Corp retain a Zacks Rank #3 (Hold).
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